Research Update: Clydesdale Bank Upgraded To 'A-' On Increasing Loss-Absorbing Capacity; Virgin Money UK Affirmed; Outlook Negative

U.K.-based Virgin Money UK PLC (VMUK) increased its additional loss-absorbing buffers above our previous expectations. We now forecast that the bank's additional loss-absorbing capacity (ALAC) ratio will remain sustainably above 8% of our risk-weighted assets, which provides further protection to the senior creditors of its operating bank, Clydesdale Bank PLC, in a resolution scenario. We are therefore raising our long-term issuer credit rating on Clydesdale Bank to 'A-' from 'BBB+'. We are affirming the 'BBB-/A-3' ratings on the nonoperating holding company (NOHC), VMUK, and all of its rated instruments that do not benefit from the ALAC buffer. The negative outlook on both legal entities reflects the ongoing risk of a downgrade over our two-year outlook horizon if our view of

...- U.K.-based Virgin Money UK PLC (VMUK) increased its additional loss-absorbing buffers above our previous expectations. We now forecast that the bank's additional loss-absorbing capacity (ALAC) ratio will remain sustainably above 8% of our risk-weighted assets, which provides further protection to the senior creditors of its operating bank, Clydesdale Bank PLC, in a resolution scenario. - We are therefore raising our long-term issuer credit rating on Clydesdale Bank to 'A-' from '###+'. - We are affirming the '###-/A-3' ratings on the nonoperating holding company (NOHC), VMUK, and all of its rated instruments that do not benefit from the ALAC buffer. - The negative outlook on both legal entities reflects the ongoing risk of a downgrade over our two-year outlook horizon if our view of U.K. banking risk deteriorates, subject to our review of the group's creditworthiness relative to peers....

Research Update